Bitcoin’s price has exhibited significant volatility recently, surpassing its previous minor swing high while simultaneously encountering substantial rejection. Nonetheless, the price is approaching a crucial area, with the overall price action signalling a bearish outlook.

Technical Analysis

By Tonitto

The Daily Chart

A thorough analysis of Bitcoin’s daily chart reveals the formation of an evident bearish double-top pattern near the major resistance region of $30K. Additionally, the price is facing significant dynamic resistance from the middle-trendline of the ascending channel. It is worth noting that this robust dynamic level has been hindering further price appreciation for several months.

Furthermore, a noticeable divergence between the price and the RSI indicator indicates a shift in the market condition from an uptrend state to a possible downtrend. In case the selling pressure dominates the market, Bitcoin’s next target would be the 100-day moving average situated around the $28K level.

Nonetheless, it seems likely that a rejection from the substantial resistance at $30K is imminent based on Bitcoin’s recent price action.

The 4-Hour Chart

The 4-hour chart demonstrates that Bitcoin’s price has entered an extended consolidation range following its arrival at the important price zone of $30K. Notably, this critical price range aligns with Bitcoin’s previous significant swing high, developed on April 14th, which has served as strong resistance due to increased supply.

Meanwhile, the price has formed an ascending wedge pattern, typically indicating a potential reversal. Most recently, the price experienced a sharp surge, reaching the upper boundary of the wedge, only to face rejection and undergo a rapid decline. However, a break below the lower edge of the wedge suggests the possibility of a mid-term reversal.

Ultimately, in the event of a rejection, Bitcoin’s next target would be the static support region around $28K.

On-chain Analysis

By Tonitto

Bitcoin’s price has been volatile, especially after a significant upward surge that brought it close to the crucial resistance level of $30K. This surge has sparked substantial speculation regarding Bitcoin’s ability to successfully break through this resistance barrier. It is advisable to closely examine the futures market to gain valuable insights into the overall market sentiment.

The provided chart illustrates the Bitcoin taker buy-sell ratio, which serves as an essential indicator of the intensity of long and short positions.

Lately, this particular metric has been fluctuating consistently below 1, following a sharp decline. However, there have been no signs of recovery thus far. This signifies that futures traders predominantly maintain a pessimistic outlook on Bitcoin, with their short positions potentially pushing downward pressure on the price in the short term.

Bitcoin price action continues to linger at the 31K resistance. The appearance of a bearish outside like candle does not bolster the bullish argument. The key to effectively navigating these situations is to keep expectations small or simply stay out until new information presents itself.

When I say keep expectations small, this is best achieved by evaluating reward / risk on smaller time frames (day trade). While this consolidation between 28.5 and 31K still implies an absence of weakness, it can also be the result of lower than usual volume typical of this time of year. In my previous article I wrote that lingering at a resistance often implies strength, but this can change, especially when too many break out attempts fail. Consider that every time there is a break out attempt, new longs continue to pile in but get absorbed.

The most recent break out attempt (the third one) should have been the one to push through the resistance IF Bitcoin is in fact strong. My concern now is this failed break out attempt has attracted more longs. These longs which should have instigated the momentum to follow through are now stuck. It is these same longs that can motivate the sell off when they all look to exit at the same time. All it takes is a piece of unexpected news. This is NOT a forecast, but the idea leads me to believe that Bitcoin may be getting vulnerable to a corrective move if 31K is not taken out in the next week or two.

I am still waiting for the 28.5 to 29.5 support zone (blue square on chart). To see if the appropriate reversal appears for a potential swing trade long. IF instead that level is compromised, I step aside. The next support is the 25K area.

The mistakes to avoid in this environment: do NOT over trade, it is very easy to do when NOTHING is going on. Do NOT cling to your own logic (markets do not operate on logic), do NOT buy into any over exaggerated claims, opinions, analysis from your favorite frauds. Most of these "experts" are not qualified to offer such "educational" content.

There is NO way to know how Bitcoin will behave from here. No matter how many lines, or oscillators one has on a chart. Markets are MOSTLY random and adjust as NEW information is processed. Unless you have inside information, you know as much as the next "expert".

This is why I tell my followers to keep expectations low. Whether they take a trend or counter trend trade, if its a losing trade, and the stop is respected, the loss should be small. More importantly by working on smaller time frames, you mitigate the broader magnitude risk. This is the best way to avoid getting caught on the wrong side and wiping out an account. Stay small or stay out.

Thank you for considering my analysis and perspective.

$BTC

Compound ended June on a positive note and continued growing all the way through the 4th July, then came the correction. 6 days closing red but a bounce is happening exactly at EMA300 (grey line on the chart). The question is this, can COMPUSD resume growing or will the correction continue? Compound moved ahead of the others, as it moved ahead the others started to follow, slowly but surely. If the correction ends for this pair, it is likely that it will also end for the other pairs. Let's see what the chart has to say. EMA300 is a very strong level so is normal to see a retest before additional growth can happen. With the strong candle we have today, it is likely that this is a real move. By real I mean that there will be a follow up. The volume is really high and this session already cancelled 4 days of red, with the total red days being 6. I am leaning bullish based on the chart signals and we can expect additional growth but, if prices move and close daily below EMA30 or $52, the bullish signals become invalid and we would need to see more red before up. Even with more red, the bigger picture would still be a higher high in the weeks to come. It is looking pretty good overall.

$COMP